Novell 'a growth company again,' says CEO

CBS.MarketWatch.com

NEW YORK (CBS.MW) -- Shares of Novell slipped slightly Wednesday after the company said that its fiscal second-quarter earnings more than doubled, beating earnings estimates for the software company.

The company
novl
reported net income of $38.7 million, or 11 cents per share, vs. $19.3 million, or 5 cents a share, a year ago. The results were a penny more than analysts' expected.

Sales increased 20 percent to $316 million, led by strong sales of NetWare 5.0, an operating system launched in September. Revenue from directory-enabled server software, such as NetWare 5.0, increased 41 percent.

"Novell is on its way to becoming a growth company again," chief executive Eric Schmidt said in a release. He added that NetWare 5.0 sales were running ahead of expectations.

Schmidt, who took control of the company in April 1997, has been turning around the Provo, Utah-based company. Novell had run into difficulties as Microsoft
MSFT, -0.44%
pushed its own networking software.

Shares of Novell have tripled during Schmidt's watch. But the stock fell 1/8 to 23 5/8 on Wednesday afternoon.

Morgan Stanley analyst Chuck Phillips raised his price target for the stock to 30 from 24 following the company's fiscal second quarter report.

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